Bingham v. American Screw Products Co.

248 N.W.2d 537, 398 Mich. 546, 1976 Mich. LEXIS 202

• Court: Michigan Supreme Court
• Decided: December 21, 1976
• Docket: 56535, (Calendar No. 10)
• Status: Published

Opinions

Williams, J.

This complex unemployment compensation case involves the interpretation of interrelated provisions of § 28 ("eligibility for benefits”) and § 29 ("disqualification from benefits”) of the Michigan Employment Security Act. There are two issues: (1) whether claimant, disqualified under the act for voluntarily terminating his employment, can requalify for benefits under the act outside the State of Michigan; (2) whether claimant, after he moved home to Kentucky, was disqualified from receiving benefits for refusing the employer’s offer of his former job or whether claimant’s rejection of this reemployment offer was with "good cause” because the offer was not an offer of "suitable work” due to the unreasonable distance between his Kentucky residence and the Michigan job offer.

At the outset, it is essential we bear in mind that our unemployment compensation act is part of a Federal-state unemployment compensation system. This Federal-state system is grounded in the Federal Social Security Act, the WagnerPeyser Act, and the Federal Unemployment Tax Act, together with state laws enacted in conformity with the standards set forth by these Federal laws. The Federal-state system is implemented by a Federal tax offset to the employers of a state provided that the state’s unemployment compensation law conforms to minimum Federal standards. Furthermore, every state legislature has included in its state unemployment compensation law provisions authorizing the responsible executive (in Michigan, the Michigan Employment Security Commission — MESC) to enter into interstate agreements. These agreements are essentially designed to deal with claimants who earned qualifying wages in one state but who upon being separated from employment moved their residence to another state and claimants who at the time of their separation from employment had accumulated wage credits sufficient to make them eligible for benefits in more than one state. Inherent in these agreements is the recognition of every state legislature of the Federal dimension of the unemployment laws and the mobility of labor essential to the operation of our private enterprise system. Both the spirit and letter of our act support these Federal and interstate aspects of unemployment compensation.

Accordingly, because of the plain language of our act as well as the aforesaid state-Federal implications, we hold that claimant Bingham, a Kentucky worker who left a Michigan job because he could not find adequate housing for his family at a price he could afford, returned to Kentucky, registered for work with the appropriate employment office there, diligently sought and made himself available for suitable work, but turned down a job offer from his former Michigan employer due to the distance from his Kentucky residence, (1) requalified for benefits after serving the period of disqualification under the act, and (2) was not disqualified for refusing his former employer’s job offer because the offer was not an offer of "suitable work” and was therefore rejected by claimant with "good cause” due to the fact that the job was too far distant from his residence.

We reinstate the administrative determination of the Michigan Employment Security Commission, and reverse the trial court and the Court of Appeals.

I — Facts

Claimant Arlie K. Bingham was employed by American Screw Products Company from February 17, 1969 to November 17, 1969. He worked as a machine operator; his last wage-rate was $3.10. per hour.

Bingham testified that he left his Michigan employment because he had been unable to find adequate housing for his wife and four children in Michigan at a price which he could afford. Bingham explained that while he was employed in Michigan he had searched continuously for a home in which his wife and four children could live. His family came to Michigan and lived with him for approximately one month; but the living quarters were inadequate. Because he was unable to find adequate living quarters within his means, his family was forced to return to Pineville, Kentucky, his original home. After his family returned to Kentucky, Bingham made further efforts to find adequate living quarters, but his efforts proved futile. He thereupon severed his Michigan employment, returning to Pineville, Kentucky, to join his family.

On December 2, 1969, Bingham filed an interstate claim for unemployment benefits with the Commonwealth of Kentucky Division of Employment Service in Middlesboro, Kentucky. On February 20, 1970 the Michigan Employment Security Commission issued a determination holding (1) claimant’s separation from employment was "a voluntary leaving without good cause attributable to the employer” under § 29(l)(a) of the Michigan Employment Security Act; (2) claimant was thereby disqualified under § 29(1)(a) of the act for the week ending November 22, 1969 and was subject to a 6-week requalification period under § 29(3), the requalification period having been completed as of January 10, 1970; (3) claimant’s benefit entitlement was reduced by 6 weeks as provided in § 29(4) of the act (from 2'6 to 20 weeks).

On March 9, 1970, the employer protested the MESC determination. The employer took no exception to the MESC’s finding that Bingham’s separation was "voluntary * * * without good cause attributable to the employer” under § 29(1)(a) of the act. However, the employer stated that on March 9, 1970 notice had been sent to Bingham to report to work on his regular job not later than March 16, 1970. Bingham, at that time living in Kentucky, refused the offer of work because of its distance from his home.

On April 3, 1970, the MESC issued a redetermination affirming its determination of February 20, 1970. The MESC held:

"[C]laimant established good cause for not reporting when recalled to report on 3/12/70 and is not subject to disqualification under the provisions of subsection 29(l)(a) of the act.

"Claimant has a car for transportation and is seeking work within a radius of 50 miles of Middlesboro, Ky., where work is generally similar to work he performed in Michigan is available. He is not placing any restrictions on his availability for work as to hours or wages. He is actively seeking work and the Kentucky agency stated that his chances of securing employment are fair.

"Claimant completed the requalification requirements of the Michigan act based on his separation. He fully meets the eligibility requirements of the Michigan act and is held eligible for benefits.”

This redetermination was affirmed by a Michigan Employment Security Commission Referee on October 14, 1970. On March 24, 1971, the Michigan Employment Security Commission Appeal Board also affirmed the redetermination.

On August 20, 1973, the circuit court reversed the appeal board decision. The court held that (1) the act prohibited Bingham from requalifying for unemployment benefits while residing outside the State of Michigan; (2) Bingham was required to have been available for work within the community where he lived when his employment relationship was severed (in this case Michigan) in order to have met the eligibility requirements of § 28(1)(c) of the act, MCLA 421.28; MSA 17.530; thus claimant was ineligible to receive benefits because he refused to accept the employer’s Michigan job offer although he was living in Kentucky at the time the offer was made.

On November 27, 1974, the Court of Appeals affirmed part (2) of the circuit court’s opinion, which held "suitable” the Michigan offer of work made to Bingham while he was living in Kentucky. 57 Mich App 21; 225 NW2d 199 (1974). The court held that as a matter of law the act required Bingham be available for work both at the locality in which he resided at the time the offer of work was made (Kentucky) and at the locality at which he resided during the period he earned his base period credit weeks (Michigan). The Court did not rule on part (1) of the circuit court’s opinion, i.e. whether Bingham could requalify for benefits while residing outside the State of Michigan. The Court held that this issue was not properly before it because the employer had not timely protested the February 20, 1970 MESC determination of this issue.

The MESC applied for leave to appeal the Court of Appeals decision. This Court granted leave on February 6, 1975.

II — Claimant Requalified for Benefits While Outside the State of Michigan

The first issue, properly¹ raised by the trial court, is whether Bingham satisfied the requalification requirements of § 29(3) while outside the State of Michigan.

Section 29(3) stated:

"(3) An individual who is disqualified under subsection 29(1) ² shall * * * complete 6 requalifying weeks * * * for each of which he * * *

"(b) would otherwise meet all the requirements of this act to receive a waiting period credit or a benefit payment if he were not disqualified under subsection 29(1) * * * ”³ MCLA 421.29(3); MSA 17.531(3).

In other words, a claimant can requalify for benefits by being eligible for benefits under the act during the 6-week requalification period. This being the case, the relevant question in determining the above stated issue is: was Bingham eligible for benefits under the act during the 6-week period beginning the week ending November 22, 1969, and terminating January 10, 1970, while in Pine-ville, Kentucky? The answer to this question is clearly yes. The act provided (§ 28[1]):

"An unemployed individual shall be eligible to receive benefits with respect to any week only if the commission finds that:

"(a) He has registered for work at and thereafter has continued to report at an employment office in accordance with such regulations as the commission may prescribe and is seeking work * * *

"(c) He is able and available to perform full-time work of a character which he is qualified to perform by past experience or training, and of a character generally similar to work for which he has previously received wages, and he is available for such work, full time, either at a locality at which he earned wages for insured work during his base period or at a locality where it is found by the commission that such work is available.” MCLA 421.28(1); MSA 17.530(1).

Bingham registered for work, pursuant to § 28(1)(a), with the Kentucky Division of Employment Service in Middlesboro, Kentucky.

Section 43 of the act defines "employment office” as "a free public employment office or branch thereof operated by this state or any other state as a part of a state-controlled system of public employment offices” MCLA 421.43; MSA 17.547 (emphasis added). Thus Bingham’s registration was wholly satisfactory and in accord with the "registration for work” requirement of § 29(1)(a).

In addition, Bingham was "seeking work” (§ 28[1] [a]) and "able and available” for work as required by the act. This Court, in Bolles v Employment Security Commission, 361 Mich 378, 385; 105 NW2d 192 (1960), declared:

"Such is the purpose of the requirement (for eligibility to benefits) that a claimant be 'able and available’ to work, that he register for work, and seek work. These * * * are indicia of genuine attachment to the labor market.”

In Dwyer v Unemployment Compensation Commission, 321 Mich 178, 188-189; 32 NW2d 434 (1948), we defined "availability” as follows:

"The basic purpose of the requirement that a claimant must be available for work to be eligible for benefits is to provide a test by which it can be determined whether or not the claimant is actually and currently attached to the labor market. To be available for work within the meaning of the act, the claimant must be genuinely attached to the labor market, i.e., he must be desirous to obtain employment, and must be willing and ready to work.”⁴

It is clear that Bingham was "seeking work” and "able and available” for work in the above sense, i.e. Bingham genuinely attached himself to the labor market within the environs of his home. It is also clear that Bingham was properly "seeking work” and "able and available” for work although he was not doing so in the locality where he earned his base credit weeks (i.e., Michigan).

Section 28(1)(c) requires that a claimant must be available for work, full time, etc., "either at a locality at which he earned wages for insured work during his base period or at a locality where it is found by the commission that such work is available”. On its face the statute provides two alternative localities in which a claimant may be available for work: (1) where he earned his base credit weeks (in this case, Michigan); (2) where the commission finds suitable work available for the claimant.

The second alternative is obviously written into the statute to provide for the situation where a claimant registers for benefits in a locality other than that in which he earned his base credit weeks and seeks available work (i.e. genuinely attaches himself to the labor market), as is a claimant’s statutory right under § 28(l)(a) read in conjunction with § 43 supra. Of course, the "new locality” in which a claimant registers for work, seeks work, and is "able and available” for work where the commission finds work available can be either in any part of Michigan or in another state. See discussion of § 28(l)(a) and § 43 supra. This conclusion is in full accord with other state courts who have adopted the "availability” test we adopted in Dwyer. As the Superior Court of Pennsylvania declared in Sturdevant Unemployment Compensation Case, 158 Pa Super 548, 560-561; 45 A2d 898, 905 (1946):

"There is no requirement in the quoted section, nor elsewhere in the act, that a claimant shall be available for work in any particular place, such as the locality in which he earned his wage credits or where he last worked or resided. The mere fact that a claimant has moved from one locality to another does not create a basis for holding him unavailable for work. If he registers for work in the new locality, and labor-market conditions there afford reasonable opportunities for work, he is available for work.”

See, in accord, Employment Security Commission v Kosic, 12 Ariz App 455; 471 P2d 757 (1970); Hunter v Miller, supra; Ashmore v Unemployment Compensation Commission, supra. See, also, Anno, Unemployment Compensation as Affected by Employee’s or Employer’s Removal from Place of Employment, 13 ALR2d p 874, pp 880-883.⁵

Bingham therefore clearly satisfied the requalification requirement of § 29(3)(b) of the act by meeting all the requirements of the act "to receive a benefit payment if he were not disqualified under subsection (1)”, while in Pineville, Kentucky. The trial court’s holding that Bingham could not re-qualify for benefits outside the state of Michigan is in error and is reversed.⁶

III — Claimant Was Not Disqualified Prom Receiving Benefits Under the Act

The second, central issue in this case is whether Bingham (having requalified for benefits under § 29[3] [b]) was disqualified under the act because he refused an offer by American Screw Works of his former job.

Section 29(1) of the act states that "[a]n individual shall be disqualified for benefits in all cases in which he * * * (e) Has failed without good cause to accept suitable work when offered him * * * ”. Section 29(6) of the act defines "suitable work” as follows:

"In determining whether or not any work is suitable for an individual, the commission shall consider * * * the distance of the available work from his residence.” MCLA 421.29(6); MSA 17.531(6).

Was American Screw Works’ offer of reemployment to Bingham an offer of "suitable work” within the meaning of § 29(6)? The legal answer turns on the statutory meaning of the word "residence” in § 29(6), i.e. did Bingham have "good cause” to refuse the offer because of the unreasonable distance between the locality of the reemployment offer and his "residence”?

The word "residence” is not defined in the act. In the absence of a statutory definition of a term,

"it is an accepted rule of construction, that words of a statute are to be given their plain and ordinary meaning, for it is to be presumed that the legislature, not having indicated otherwise, so intended.” 22 Callaghan’s Michigan Civil Jurisprudence, § 121, p 479.

See Grand Rapids Gravel Co v Department of Treasury, 14 Mich App 677, 681-682; 166 NW2d 53 (1968).

The common sense, "plain and ordinary” meaning of the word "residence” is clear: a person’s "residence” is where that person actually lives. Bingham lived in Pineville, Kentucky. A job offer in Farmington, Michigan is an unreasonable distance from Pineville, Kentucky and therefore not "suitable work” under § 29(6). Accordingly, Bingham should not be disqualified for refusing such a job offer.

The legal answer to the meaning of "residence” substantiates the common sense answer. In Wright v Genesee Circuit Judge, 117 Mich 244, 245; 75 NW 465 (1898), this Court defined the ordinary meaning of "residence” as follows:

"Residence means the place where one resides; an abode; a dwelling or habitation; especially,- a settled or permanent home or domicile. Residence is made up of fact and intention. There must be the fact of abode, and the intention of remaining. Estate of Heron, 6 Phila 87, 90 (Register’s Ct, 1865).”

In In re Scheyer’s Estate, 336 Mich 645, 651-652; 59 NW2d 33 (1953), in discussing the ordinary meaning of "residence”, we affirmed the definition articulated in the Wright case. In addition, we declared:

"Throughout the definitions of 'home’ and 'residence,’ as herein quoted above, runs the thought of permanence, of a place to which one returns, a place where one intends to remain, a haven or domicile. Suggested, too, is the thought of 1 unit or 1 place as contrasted with several. One cannot be permanently located in more than 1 place; one cannot be domiciled in more than 1 place; one cannot intend to remain for an extended period of time in more than 1 place. ” (Emphasis added.)

Applying this definition to the facts of this case, it is clear that Bingham’s "residence”, his "settled or permanent home,” where he "intends to remain”, is Pineville, Kentucky. Therefore, under § 29(l)(e) read in conjunction with § 29(6), Bingham was not disqualified for refusing American Screw Works’ reemployment offer because his refusal was with "good cause”; the offer was not an offer of "suitable work” because the locality of the reemployment offer (Farmington, Michigan) was clearly an unreasonable distance from his Pineville, Kentucky residence. We hold that the claimant was not disqualified.

The Court of Appeals, in a 2-to-l decision, however, held that Bingham was disqualified under § 29(l)(d) for having refused an offer of "suitable work” without "good cause”. The Court reached its holding by ruling, as a matter of law, that "residence” in § 29(6) "means both the locality in which the claimant resides at the time the offer of the job was made and the localities in which claimant resided during the period he earned the base period credit weeks”. (Emphasis added.) 57 Mich App 21, 29.

We find the Court of Appeals holding is clearly erroneous.

First, the Court’s unorthodox interpretation of the word "residence” to mean that a claimant may reside in two (or more) places rather than one place must be rejected in light of the definition of the word "residence” pronounced by this Court in Wright v Genesee Circuit Judge and In re Schemer’s Estate, the definition we must apply in this case because of the lack of a statutory definition of the term. Furthermore, to interpret "residence” as the Court of Appeals does would be essentially amending § 29(6) to reach a result contrary to that mandated by the plain language fixed by the Legislature. This we cannot do.

"It is not the proper function of the court to amend the statute to broaden or extend the disqualifications fixed, in plain language, by the legislature.” Thomas v Employment Security Commission, 356 Mich 665, 669; 97 NW2d 784 (1959).

Second, the result of the Court of Appeals holding is that where an offer of reemployment is made to an employee who has moved and established residence in a locality outside the radius of what constitutes a reasonable distance from the locality where he earned his base credit weeks, he must accept such an offer or be disqualified by the commission.⁷ This result, which would effectively discourage (if not altogether impede) an involuntarily as well as voluntarily unemployed person who desires to exercise his fundamental right of freedom of movement to seek a job where it is best for him within our private enterprise system, is clearly contrary to those statutory provisions which enable the MESC to enter into reciprocal interstate agreements in recognition of the mobility of labor and must, therefore, be rejected.⁸

Third, this result of the Court of Appeals holding is inconsonant with the underlying law and spirit of the Federal-state unemployment compensation system. The Employment Security Amendments of 1970, Internal Revenue Code of 1954, speak directly to this point. Section 3304(a)(9)(A) states:

"[C]ompensation shall not be denied or reduced to an individual solely because he files a claim in another State * * * or because he resides in another State * * * at the time he files a claim for unemployment compensation.” 26 USC 3304(a)(9)(A). (Emphasis added.)⁹

The need for conformity to basic Federal law in this area is illustrated by California Department of Human Resources Development v Java, 402 US 121; 91 S Ct 1347; 28 L Ed 2d 666 (1971), where the Supreme Court enjoined the withholding of employee benefits pending employee appeal as violative of § 303(a)(1) of the Social Security Act, 42 USCA 503(a)(1), which requires administration of state unemployment compensation laws in a manner "reasonably calculated to insure full payment of unemployment benefits when due”. 402 US 121, 125.

However, under the Court of Appeals holding, an unemployed person who moves to another state (outside the radius of what constitutes a "reasonable distance” from the Michigan locality where he earned base credit weeks) and becomes eligible for benefits there, would have to accept a reemployment offer or be disqualified by the MESC. In effect, such a person faces the prospect of being denied compensation, "because he resides in another state”. This kind of ruling would, therefore, frustrate the Federal policy expressed in 26 USC 3304(a)(9)(A) as effectively as the construction enjoined in Java. If challenged, it is likely that it would be enjoined to secure Federal conformity. But we need not fear this prospect because our holding that the common, ordinary meaning of "residence” applies to § 29(6) vindicates, rather than frustrates, the Federal scheme.

Finally, the Court of Appeals reached its holding that "residence” in § 29(6) means either a claimant’s residence when the job offer is made or a claimant’s residence at the time he earned his base credit weeks on the basis of erroneous statutory construction. First, the court argued that it would be anomalous to say the eligibility requirement in § 28(1)(c) conjunctively required seeking work "either at a locality in which he earned his credit weeks or at a locality where the commission finds available work” and not to rule the same way with respect to the disqualification in § 29(1)(d). However, the fact of the matter is that in part II we have already held that § 28(1)(c) is clearly disjunctive and not conjunctive. Consequently, there is no anomaly.

Second, the Court of Appeals feared an anomaly between § 29(6) and § 28(1)(a)(2). Section 28(1)(a)(2) provides:

"Except for period of disqualification, the requirement that the individual shall seek work may be waived by the commission where it finds that suitable work is unavailable both in the locality where the individual resides and in those localities in which the individual has earned base period credit weeks.” MCLA 421.28(1)(a)(2); MSA 17.530(1)(a)(2).

The Court of Appeals argued:

"This language clearly indicates that suitable work may exist not only in the locality where the claimant resides but also at the localities at which claimant earned credit weeks. We are thereby compelled to conclude that the term 'residence’ as used in § 29(6) means both the locality in which the claimant resides at the time the offer of the job was made and the localities in which claimant resided during the period he earned the base period credit weeks.” 57 Mich App 21, 29.

The Court of Appeals argument, although superficially plausible, is fundamentally erroneous. First, § 28(1)(a)(2), instead of suggesting that § 29(6) refers to two (or more) residences, clearly recognizes that the locality of residence and where the individual earned base period credit weeks may be two separate localities. Section 29(6), of course, considers only the former, or locality of residence. Second, the locality of residence and the locality where base credit weeks are earned may be two separate places but not so distant from each other that work at the latter would not be within reasonable distance from the claimant’s residence. Thus, § 28(1)(a)(2) and § 29(6) can be logically interpreted together.

Because of the clear language in the Michigan Employment Security Act, the interstate agreements accompanying it, and the Federal-state dimension integral to it, we hold that claimant Bingham, a Kentucky worker who left a Michigan job because he could not find adequate housing for his family at a price he could afford, returned to Kentucky, registered for work with the appropriate employment office there, diligently sought and made himself available for suitable work, but turned down a job offer from his former Michigan employer due to the distance from his Kentucky residence, (1) requalified for benefits after serving the period of disqualification under the act, and (2) was not disqualified for refusing his former employer’s job offer because the offer was not an offer of "suitable work” and was therefore rejected with "good cause” due to the fact that the job was too far distant from his residence.

We reinstate the administrative determination of the Michigan Employment Security Commission, and reverse the trial court and the Court of Appeals.

No costs, a public question.

Kavanagh, C. J., and Levin, J., concurred with Williams, J. Ryan, J., took no part in the decision of this case.

1 The circuit court held that claimant was required to reside in the State of Michigan in order to requalify for benefits under the act. On appeal, the Court of Appeals held that it was unnecessary to rule on this issue "Since defendant company neither appealed nor sought a redetermination on that question within the 15-day period specified by MCLA 421.32a; MSA 17.534(1), the question was not properly before the circuit court.” 57 Mich App 21, 25. The basis of the court’s decision was that the employer did not file its protest of the February 20, 1970 determination within the 15-day period prescribed by § 32a of the act. Section 32a provided in pertinent part:

"The commission shall upon application by an interested party filed with the commission within 15 days after the mailing or personal service of a notice of determination, or may upon its own motion within said period, review any determination and thereafter issue a redetermination affirming, modifying or reversing the prior determination and stating the reasons therefor. * * * ” MCLA 421.32a; MSA 17.534(1).

Both the MESC and the employer contend the court’s decision not to rule on this issue was in error. We agree. A review of the record reveals that the employer protested the February 20, 1970 determination on March 9, 1970. The fifteenth day after February 20, 1970 was Saturday, March 7, 1970.- Because the last day of the 15-day period was a Saturday, the time for filing the appeal was automatically extended to Monday, March 9, 1970, pursuant to § 49 of the act, which provided in pertinent part:

"Whenever the last day of the 15-day period, provided for in sections 14, 32a, 33, 34 and 38, falls on a Saturday, Sunday, or legal holiday, such 15-day period shall run until the end of the next day which is neither a Saturday, Sunday, nor legal holiday. * * * ” MCLA 421.49; MSA 17.553(1).

When § 49 of the act is applied, it is clear that the employer’s protest of the February 20, 1970 determination was timely filed on March 9, 1970. Therefore we find that the Court of Appeals erred in not ruling upon the requalification issue and that this issue is properly before us.

2 Bingham was disqualified under § 29(1)(a) of the act for having left his work "voluntarily without good cause attributable to the employer”. In addition to the 6-week requalification requirement of § 29(3), as a result of his disqualification Bingham’s benefits were reduced 6 weeks from 26 to 20 weeks. See § 29(4), MCLA 421.29(4); MSA 17.531(4).

The period of disqualification prescribed in § 29(3), a legislative determination, was extended from 6 to 13 weeks with respect to persons disqualified under § 29(1)(a) of the act in 1975 PA 110, § 1, eff June 6, 1975.

3 A claimant may also requalify for benefits by earning or receiving remuneration in excess of $25 (§ 29[3] [a]) or receiving waiting week credit or a benefit payment based on credit weeks subsequent to the disqualifying act or discharge (§ 29[3] [c]). These alternatives are not pertinent to the facts of this case.

4 As we stated in Dwyer, "Such is the rule in other jurisdictions. See Reger v Administrator, Unemployment Compensation Act, 132 Conn 647, 46 A2d 844 (1946); Hunter v Miller, 148 Neb 402, 27 NW2d 638 (1947).” See also Ashmore v Unemployment Compensation Commission, 46 Del 565; 86 A2d 751 (Superior Ct 1952). As these cases indicate, the source of this rule is Freeman, Able to Work and Available for Work, 55 Yale L J 123, 124 (1945):

"The availability requirement is said to be satisfied when an individual is willing, able, and ready to accept suitable work which he does not have good cause to refuse, that is, when he is genuinely attached to the labor market. Since, under unemployment compensation laws, it is the availability of an individual that is required to be tested, the labor market must be described in terms of the individual. A labor market for an individual exists when there is a market for the type of services which he offers in the geographical area in which he offers them. 'Market’ in this sense does not mean that job vacancies must exist; the purpose of unemployment compensation is to compensate for the lack of appropriate job vacancies. It means only that the type of services which an individual is offering is generally performed in the geographical area in which he is offering them.”

5 For contrary decisions in states which have not adopted the "availability” test we have, see 13 ALR2d, pp 874, 883-885.

However, the validity of these decisions is questionable in light of the subsequently passed Employment Security Amendments of 1970, Internal Revenue Code of 1954, § 3304(a)(9)(A) (effective January 1, 1972), which states:

"[C]ompensation shall not be denied or reduced to an individual solely because he files a claim in another State * * * or because he resides in another State * * * at the time he files a claim for unemployment compensation.” 26 USC 3304(a)(9)(A) (emphasis added).

See fn 9 and accompanying text infra.

6 The question of whether a claimant can requalify for benefits while living in a state other than Michigan has never been decided by our Court. The Court of Appeals, in Roman Cleanser Co v Murphy, 29 Mich App 155; 185 NW2d 87 (1970), did, however, have occasion to decide this question, holding that a claimant could not requalify under § 29(3) of the act while residing outside the State of Michigan. We overruled Roman Cleanser, but did so on the grounds that it was unnecessary to reach the requalification issue because no timely appeal was taken from the MESC determination in that case, thereby rendering the MESC determination res judicata. 386 Mich 698; 194 NW2d 704 (1972).

In reaching its conclusion in Roman Cleanser that a claimant could not requalify for benefits under § 29(3) while residing outside the state, the Court of Appeals relied on Merren v Employment Security Commission, 380 Mich 240; 156 NW2d 524 (1968):

"In Merren v Employment Security Commission, 3 Mich App 383 [142 NW2d 493] (1966), affirmed by an equally divided court, 380 Mich 240, this Court held that an employee who voluntarily left his employment with a Michigan employer and took work with an out-of-state employer, and who was then laid off by the out-of-state employer, was not entitled to reinstatement or use of any part of the credit weeks he had acquired while working for the Michigan employer. Those credit weeks were cancelled by virtue of the employee’s voluntary quitting. Our rationale in Merren was that:

" ' "To grant Merren’s claim [would be] to penalize Lear Siegler [the Michigan employer], who would then pay Merren from its own account without any contribution from another 'employer’.” ’ "Likewise, were we to hold in the present case that Murphy’s work in Kentucky requalified him for benefits under the act we would penalize Roman by requiring it to pay Murphy from its own account without any contribution from another employer. This we refuse to do.

“We adhere to our decision in Merren. It controls this case. The commission erred as a matter of law in determining that Murphy’s work with an out-of-state employer requalified him for benefits chargeable to the account of his former Michigan employer. We conclude that Murphy stands disqualified under the act.” 29 Mich App 155, 165.

We disagree with this reasoning and conclusion reached by the Court of Appeals in Roman Cleanser. The court fails to mention that in Merren this Court was presented with a statute altogether different in substance from § 29(3). Section 29(1)(a)(1) of the act, which was the statute at issue in Merren, (1955 PA 281) provided:

"(1) An individual shall be disqualified for benefits:

"(a) For the duration of his unemployment in all cases where the individual has: (1) Left his work voluntarily without good cause attributable to the employer or employing unit * * * .

"Provided further, however, That if an individual leaves his work voluntarily without good cause attributable to the employer for the purpose of accepting permanent full-time work with another employer, and if, during the 39 weeks following his separation he is laid off for lack of work by his new employer, enough of his credit weeks with his separating employer whom he left voluntarily shall be reinstated so that the total number of weeks of benefits available to him from all employers at the time of such lay off will not be less than if he had been laid off by the said separating employer * * * .”

In Merren, the claimant voluntarily left his Michigan employer and went to work in Florida for a Florida employer. He was then laid off by his Florida employer and filed a claim for benefits under the MESA, asking for reinstatement or use of a part of his Michigan credit weeks which were previously cancelled by his voluntary termination of employment in Michigan. The Court of Appeals accurately perceived the issue in Merren as being whether claimant, having been disqualified under the act for voluntarily terminating his Michigan employment was entitled to reinstatement or use of any part of the "credit weeks” he had acquired while working for his Michigan employer, which were cancelled as an incident of his disqualification. See 3 Mich App 383, 385, 386. Claimant contended that he should not have been disqualified under the proviso of then § 29(1)(aX1) supra. Both the Court of Appeals and this Court recognized that the merit of claimant’s contention turned on the meaning of the word "employer” as used in the portion of the proviso which states: "for the purpose of accepting permanent full-time work with another employer”. This, Court then looked to the interaction of § 40 and § 41 of the act. Section 40 of the act defined "employing unit” as follows:

" 'Employing unit’ means any * * * corporation, whether domestic or foreign, * * * which has or subsequent to this amendatory act, had in its employ 1 or more individuals performing services for it within this state. * * * ” (Emphasis added.)

Section 41 of the act definéd "employer” as follows:

" 'Employer’ means (1) * * *

"(b) Any employing unit which in each of 20 different weeks within the calendar year 1956 or within any succeeding calendar year * * * has or had in employment 4 or more individuals * * * .”

We held that the reinstatement provision of § 29(1)(a)(1) of the act, read in conjunction with § 40 and § 41, mandated the conclusion that the reinstatement provision applied only when a claimant voluntarily left a Michigan employer to accept work with another Michigan employer and was subsequently laid off from the last Michigan employer. But this conclusion was necessitated by the particular statutory language of the proviso found in §29(1)(a)(1). Section 29(1)(a)(1) required that both the separating employer and the new employer be Michigan employers because the MESC could not add credit weeks earned in Michigan (under the Michigan employer) to credit weeks earned in Florida (under the Florida employer). In Merren, the MESC had no legislative jurisdiction over the Florida employer; therefore, the MESC could not pay benefits to a claimant chargeable to the Florida employer. Clearly, under § 29(1)(a)(1), "[T]o grant Merren’s claim [would be] to penalize Lear Siegler [the Michigan employer], who would then pay Merren from its own account without any contribution from another 'employer.’ ”

But in the instant case, no such restrictive provisions exist in § 29(3). The "requalification” requirement under § 29(3) has no adverse effect upon non-Michigan employers. Because Merren deals with altogether different substantive issues, its holding does not affect the question of whether a claimant can requalify outside the State of Michigan.

7 This would be true not only with respect to an eligible claimant who has been disqualified, and then requalified, under the act, but also to an eligible claimant who has never been disqualified under the act (i.e. one who is laid off). The act itself makes no distinction as to the eligibility or disqualification of those unemployed persons who are disqualified and then requalify and those unemployed persons who are never disqualified.

8 The Legislature, in the preamble to the act, declared, in part, that our unemployment compensation law was "An act * * * to enter into reciprocal agreements and to cooperate with agencies * * * of other states charged with the administration of any unemployment insurance law”. In addition to the preamble, the provisions of § 11 of the act, MCLA 421.11; MCLA 17.511, enable the MESC to enter into reciprocal agreements with other states to pay interstate claims. See, in particular, § 11(c), § 11(d), § 11(f), § 11(g). Accordingly, the commission has entered into two basic types of agreements: (1) the Interstate Benefit Payment Plan (formally accepted by the then Michigan Unemployment Compensation Commission at the Interstate Conference of Unemployment Compensation Agencies, November 28, 1937); (2) the Interstate Agreement for Combining Wages (both the Basic Interstate Plan for Combining Wages and the Extended Interstate Plan for Combining Wages); see MESC Manual, Appendices 1 and 2 to Chapter 8600-8699, Part V, Unemployment Compensation Interstate Wage Combining Plans.

The Interstate Benefit Payment Plan is accurately described as follows:

"This plan makes it possible for individuals to collect unemployment insurance beneñts from a state in which they have qualifying wages, although they are not present in that state. The procedures developed under the plan provide that each state may act as an agent in taking claims for all other states. Thus, each state will pay benefits computed on the basis of wages earned under its law and determined under its benefit formula on claims taken in the local offices of any other state acting as an agent for the liable state. The plan is based on the principle that benefit payments to a multi-state worker are to be subject to the same requirements that would apply if he were actually in the state from which he claims benefits. In taking a claim from an unemployed worker, the 'agent’ state does not and has no authority under the plan to make decisions regarding the worker’s rights under the law of the 'liable’ state. The 'agent’ state merely obtains the necessary information from the worker and forwards it to the 'liable’ state in order that the látter may make its own determination as to eligibility, and amount and duration of benefits in accordance with its own law. Before claiming benefits from any other state, the worker is required to exhaust whatever benefit credits he may have in the state in which he becomes unemployed. He may then file claim for benefits against any other state or states in which he may have acquired credits. In the event a multi-state worker has benefit rights under the laws of two or more 'liable’ states, benefits are paid by those states in the same chronological order as the worker earned his benefit credits in the respective states.” (Emphasis added.) IB Commerce Clearing House, Unemployment Insurance Reports, ¶ 2050, p 4586 (1976). These agreements exist between all states. See IB Commerce Clearing House, Unemployment Insurance Reports, ¶ 2050, pp 4585, 4586 (1976).

The Court of Appeals, in its conclusory remarks, stated:

"We are not unaware of the provisions of § 11 of the act with respect to cooperative agreements which the commission may enter into with similar agencies in other states. Clearly, our holding herein will in no way affect any reciprocal agreement to pay a pro rata share of benefits based upon the respective credit weeks earned in the various states where the claim is made under the law of the other state.” 57 Mich App 21, 29-30.

This conclusion may be technically accurate as to the Basic Interstate Agreement for Combining Wages in which the MESC has agreed to pay a pro rata share of benefits for the claimant who has worked in two or more states (including Michigan) but who is not eligible for beneñts in any state because of lack of qualifying wages. See MESC Manual, Appendix 1 to Chapter 8600-8699, Part V. The kind of claimant protected by these agreements, is not affected by the Court of Appeals holding because such a claimant, never having been eligible, does not face the prospect of being disqualified after he moves and refuses the reemployment offer. However, the Court of Appeals fails to mention the Interstate Benefit Payment Plan which is designed to benefit the unemployed person who has earned qualifying base credit wages in Michigan and thereafter exercises his right to freedom of movement in the labor market by moving from the locality where he earned base credit weeks to another state where he registers for work, seeks work, and is "able and available for work,” or the Extended Interstate Plan for Continuing Wages, which is designed to benefit the unemployed person who moves to another state, finds employment, and then becomes unemployed again. See, MESC Manual, Appendix 2 to Chapter 8600-8699, Part V. The obvious purpose of these agreements is to provide benefits for the eligible claimant who has earned qualifying base credit weeks in Michigan, moved to another state, and become eligible for benefits in the other state. The Court of Appeals holding, which discourages an otherwise eligible claimant from exercising his right to freedom of movement within the labor market, clearly undermines these agreements.

9 As we noted in fn 5, this Federal legislation became effective January 1, 1972. See Annotations, 26 USCA 3304(a)(9)(A) (Pocket Part 1976), p 171.